APAC banks face mounting credit losses from property exposure

Credit losses could rise 7% to $490b in 2023, S&P Global Ratings projected.

Concerns loom in the Asia-Pacific financial sector, particularly regarding property-related risks, S&P Global Ratings warned.

Credit analyst Gavin Gunning of S&P Globa Ratings emphasised monitoring risks from China and Vietnam, as well as potential challenges faced by nonbanks in Korea due to real estate project financing.

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Last year, banks in the region experienced credit losses of $490b, expected to rise by 7% in 2024. Should real estate markets deteriorate beyond expectations, nonperforming loans linked to property could exceed estimates, leading to higher credit losses.